Book Review: Chris Martenson's 'Crash Course'

The first thing to understand about Chris Martenson, the respected financial
consultant and commentator, is that he's a PhD in pathology who is, as a result,
very comfortable with complex, technical ideas. He's also a clear, concise
writer. In Crash
Course: The Unsustainable Future Of Our Economy, Energy, And Environment he'll
toss off sentences like "Money is a tertiary abstraction that gets its meaning
from real forms of wealth," and by the time a reader sees this, the meaning
is both clear and profound because Martenson has done such a good job of laying
out the necessary building blocks.

The "gloom and doom" genre is pretty crowded, of course, beginning with Robert
Prechter's Conquer
the Crash and running through heavyweights like Peter
Schiff, Jim
Rogers and James
Turk, all critiquing basically the same financial train wreck. For
a book to join this list it has to present new information in a highly engaging
way. Martenson pulls this off. His chapter on the myriad lies the US government
is telling us is, by itself, worth the price of the book. One tidbit: 35% of
US GDP is fictitious, thanks to statistical tricks like hedonic adjustments
and "owners equivalent rent."

His take on energy covers the obligatory Peak Oil but also lays out a Peak
Coal thesis that isn't yet common knowledge. Turns out that just as we're running
out of cheap oil, we've already mined the best coal and are now working our
way through the less desirable grades. So despite rising volumes of coal mined,
the total amount of energy the US is getting from coal has plateaued. He also
explains how fossil fuels produced such a radical change in developed country
lifestyles in less than a century: Gasoline is such a concentrated form of
energy that one gallon is equivalent to 350-500 hours of human labor. A middle
class American family thus owns an army of "energy slaves" that dwarfs the
resources of the richest ancient kings.

Another surprisingly useful chapter covers the power of exponential growth.
Pretty much every half-serious investor thinks they already understand compounding
(I certainly thought I did), but Martenson's rigorous, data-rich analysis held
my attention. Did you know, for instance, that when something is compounding
at a steady rate each doubling produces not just twice the previous total,
but more than all previous doublings combined?

The power -- and destructiveness -- of this final doubling is the book's underlying
theme. Debt, of course, is growing exponentially and this alone could destroy
the world as we know it. But the problem goes far beyond debt. The US money
supply, global population and energy use, the depletion of topsoil and fisheries
are all heading into final, catastrophic doublings. This convergence of crises
could, says Martenson, produce more than a financial crash. We're looking at
the end of exponential growth -- while living in societies built on the premise
that exponential growth will never end. Here's the Amazon
link.

John Rubino edits DollarCollapse.com and has authored or co-authored five
books, including The Money Bubble: What To Do Before It Pops, Clean
Money: Picking Winners in the Green Tech Boom, The Collapse of the Dollar
and How to Profit From It, and How to Profit from the Coming Real Estate
Bust. After earning a Finance MBA from New York University, he spent the
1980s on Wall Street, as a currency trader, equity analyst and junk bond analyst.
During the 1990s he was a featured columnist with TheStreet.com and a frequent
contributor to Individual Investor, Online Investor, and Consumers Digest,
among many other publications. He now writes for CFA Magazine.